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Steelcase Inc. (SCS) Hit a 52 Week High, Can the Run Continue?
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Have you been paying attention to shares of Steelcase (SCS - Free Report) ? Shares have been on the move with the stock up 16.7% over the past month. The stock hit a new 52-week high of $14.54 in the previous session. Steelcase has gained 99.6% since the start of the year compared to the 22.2% move for the Zacks Business Services sector and the 64.9% return for the Zacks Business - Office Products industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on December 19, 2023, Steelcase reported EPS of $0.3 versus consensus estimate of $0.17 while it missed the consensus revenue estimate by 0.8%.
For the current fiscal year, Steelcase is expected to post earnings of $0.78 per share on $3.16 billion in revenues. This represents a 39.29% change in EPS on a -2.2% change in revenues. For the next fiscal year, the company is expected to earn $1 per share on $3.25 billion in revenues. This represents a year-over-year change of 28.21% and 2.82%, respectively.
Valuation Metrics
Steelcase may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Steelcase has a Value Score of A. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 18.1X current fiscal year EPS estimates, which is a premium to the peer industry average of 17.6X. On a trailing cash flow basis, the stock currently trades at 10.2X versus its peer group's average of 6.1X. Additionally, the stock has a PEG ratio of 1.81. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Steelcase currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Steelcase passes the test. Thus, it seems as though Steelcase shares could have potential in the weeks and months to come.
How Does SCS Stack Up to the Competition?
Shares of SCS have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Deluxe Corporation (DLX - Free Report) . DLX has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of D, and a Momentum Score of B.
Earnings were strong last quarter. Deluxe Corporation beat our consensus estimate by 16.18%, and for the current fiscal year, DLX is expected to post earnings of $3.33 per share on revenue of $2.19 billion.
Shares of Deluxe Corporation have gained 12.2% over the past month, and currently trade at a forward P/E of 6.31X and a P/CF of 2.39X.
The Business - Office Products industry is in the top 2% of all the industries we have in our universe, so it looks like there are some nice tailwinds for SCS and DLX, even beyond their own solid fundamental situation.
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Steelcase Inc. (SCS) Hit a 52 Week High, Can the Run Continue?
Have you been paying attention to shares of Steelcase (SCS - Free Report) ? Shares have been on the move with the stock up 16.7% over the past month. The stock hit a new 52-week high of $14.54 in the previous session. Steelcase has gained 99.6% since the start of the year compared to the 22.2% move for the Zacks Business Services sector and the 64.9% return for the Zacks Business - Office Products industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on December 19, 2023, Steelcase reported EPS of $0.3 versus consensus estimate of $0.17 while it missed the consensus revenue estimate by 0.8%.
For the current fiscal year, Steelcase is expected to post earnings of $0.78 per share on $3.16 billion in revenues. This represents a 39.29% change in EPS on a -2.2% change in revenues. For the next fiscal year, the company is expected to earn $1 per share on $3.25 billion in revenues. This represents a year-over-year change of 28.21% and 2.82%, respectively.
Valuation Metrics
Steelcase may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Steelcase has a Value Score of A. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 18.1X current fiscal year EPS estimates, which is a premium to the peer industry average of 17.6X. On a trailing cash flow basis, the stock currently trades at 10.2X versus its peer group's average of 6.1X. Additionally, the stock has a PEG ratio of 1.81. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Steelcase currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Steelcase passes the test. Thus, it seems as though Steelcase shares could have potential in the weeks and months to come.
How Does SCS Stack Up to the Competition?
Shares of SCS have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Deluxe Corporation (DLX - Free Report) . DLX has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of D, and a Momentum Score of B.
Earnings were strong last quarter. Deluxe Corporation beat our consensus estimate by 16.18%, and for the current fiscal year, DLX is expected to post earnings of $3.33 per share on revenue of $2.19 billion.
Shares of Deluxe Corporation have gained 12.2% over the past month, and currently trade at a forward P/E of 6.31X and a P/CF of 2.39X.
The Business - Office Products industry is in the top 2% of all the industries we have in our universe, so it looks like there are some nice tailwinds for SCS and DLX, even beyond their own solid fundamental situation.